EPA Reneges on Trump’s Biofuels Deal

by Jim Lane “EPA Reneges on Trump’s Biofuels Deal”, said the Iowa Renewable Fuels Association in reacting to the US Environmental Protection Agency’s new plans for fulfilling federal renewable fuel requirements. EPA released a proposed supplemental rule for the Renewable Fuel Standard today, and the bioeconomy is up in arms, and the outrage is centered in farm country, once a Trump bastion of support. “IRFA members continue to stand by President Trump’s strong biofuels deal announced on Oct. 4, which was worked out with our elected champions and provided the necessary certainty that 15 billion gallons would mean 15 billion gallons, even after...

Green Plains’ Cattle Drive

As quickly as the ethanol producer jumped into the cattle business, Green Plains (GPRE:  Nasdaq) has sold off half of its Green Plains Cattle Company to a group of investment funds for $77 million.  Operating at six locations in Colorado, Kansas, Texas and Missouri, the company has the capacity to feed 355,000 head of cattle each year.  The cattle business contributed $271 million to total revenue in the most recently reported quarter ending June 2019, delivering a modest operating profit near $7.3 million. There has been considerable stress in the feed cattle industry.  The number of cattle in feedlots is down compared to last year, an unusual development...

Betting On Renewable Diesel: Valero or Darling?

Valero Energy (VLO:  NYSE) recently disclosed ongoing discussions to expand its renewable diesel production to a second plant that would be built and managed by its Diamond Green Diesel joint venture with Darling Ingredients (DAR:  NYSE).  The proposed plant that would be located in Port Arthur, Texas and turn out 400 million gallons of renewable diesel and 40 million gallons of naptha per year.  As a food by-products processor Darling has easy access to low-cost used cooking oils and animals fats that serves as the feed stock for Diamond Green’s renewable diesel production.  Valero management has cited increasing global demand for low- to no-carbon...
earnings roundup

Living Endangeredly- Q2 Biobased Earnings Roundup

by Jim Lane In hand we now have the latest earnings reports from what you might call the 8 Pathfinders – eight publicly traded stocks whose second quarter results offer insights into the health and performance of the advanced bioeconomy as 2019 heads towards its closing crescendos. Our 8 Pathfinders – In the world of global renewable diesel at scale, Neste (Neste.HE); pure-play enzymes, Novozymes (NVMB); In pharma and synbio, Codexis (CDXS); as a hybrid play in advanced fuels, Aemetis (AMTX); in advanced marine and jet fuels, Gevo (GEVO); for biodiesel and hydrocarbons, Renewable Energy Group (REGI); in advanced began foods,...
biofuel dispenser

Trump Takes Down Ethanol in Pincer Move

by Debra Fiakas, CFA The Trump Administration is using tariffs on China goods as a trade war tactic to pressure China into relenting to U.S. trade policy demands.  Unfortunately, the fallout has been heavy and widespread.  Farmers have taken the heaviest hits as China has dropped orders for corn and soybeans.  Ethanol producers have been ensnared in the trade war skirmish as well and in recent weeks have been caught an uncomfortable ‘pincer-like’ squeeze by the Trump Administration. Trump’s Environmental Protection Agency has continued its practice of granting waivers to oil and gas refiners, eliminating the requirement to blend biofuel with the refiners’ petroleum...
REG factory closure

Another Biodiesel Plant Gets The Axe. Here’s Why.

by Jim Lane In another small but sharp blow to the Trump Administration’s strategy for American manufacturing revival, news arrives from Texas of a second smaller biodiesel shuttering owing to “ challenging business conditions and continued federal policy uncertainty,” as Renewable Energy Group (REGI) phrased it in announcing the closure of its15 million gallons per year New Boston, Texas biorefinery.  The company is currently working with plant employees on relocation opportunities within the production network. The tax credit issue The forces impacting the US biodiesel industry at present are complex, but REG in this case is pointing the blame at the biodiesel tax...
Mirai

Beyond ZEVs: The Negative Emission Vehicle

by Jim Lane Wandering the halls at the BIO World Congress and later to be seen again at ABLC NEXT this November, we ran across one of the most interesting technologies relating to ethanol production and markets we have seen in a month of Sundays, perhaps two months’ worth. The problem First, let’s revisit the problem. There’s simply too much ethanol being produced for the markets to absorb, given the Trump Administration’s massive cutbacks in US ethanol targets —In the resulting massively oversupplied market, the inevitable has happened, ethanol producers, growers and the Midwestern economies are being crushed. And they thought they...
rice straw

Making Cash From Rice Trash

by Jim Lane In our three-part series this month on utilizing waste resources, we’ll turn to rice straw, which is a major headache for Chinese and Indian emissions. Praj and Gevo are working hard on perfecting a technology to address this. Specifically, in the past month, Gevo (GEVO) also executed an agreement with Praj to develop jet fuel and isooctane from rice straw and other feedstocks. Gruber noted that “we believe this second-generation technology combination has great potential to address India’s rice straw burning problem and related air pollution, while generating low-carbon hydrocarbons for jet fuel and gasoline. Praj is a leader...
yeast feast

Enzyme Breakthroughs From The Majors

by Jim Lane Three big product announcements just in… DSM (e) breaks through on yield, efficiency with new yeast, enzyme offerings for corn fiber conversion. Novozymes (Copenhagen:NZYM-B; OTC:NVZMY) launches breakthrough techs “Fortiva” and “Innova Force”. DuPont (DD) extends with corn oil extraction tech. In Indiana, DSM leads the news out of the Fuel Ethanol Workshops with their latest yeast and enzyme offerings, eBOOST GT and eBREAK 1000F. Up to 60 percent GA reduction We’ve seen the eBOOST brand over the past year — so here’s a significant cost savings opportunity in the form of a line extension. eBOOST GT, which has been tested and qualified at commercial...
ADM HQ

ADM Separates Ethanol Business

Prelude to a spin-off? by Jim Lane The Archer Daniels Midland Company (ADM) is breaking news of breaking off their ethanol unit…and a tumbling 40% decline in profit. In Chicago, Archer Daniels Midland Company reported their financial results for the quarter ended March 31, 2019, but most interesting to us, they are looking at separating their ethanol business with the option of spinning it off completely. They are also taking other actions to restructure and deal with challenges they say include weather issues and trade pressures. ADM announced a “series of measures to continue to underpin long-term-value creation” which included: “First, to meet growing customer...

Neste’s Growing Circular Economies

by Jim Lane In California, waste feedstock from the city of Oakland is now being converted to Neste (NEF.F, NESTE.HE, NTOIF, NTOIY) MY Renewable Diesel and fuels the city’s fleet. The city, Neste, fuel distributor Western States Oil and local collectors for used cooking oil joined forces to gather waste cooking oils from restaurants and other businesses in the Oakland metropolitan area and convert it to fuel the city’s fleet. By making waste more valuable and supporting jobs that collect and treat it, this concept helps the local economy in the city while the cleaner-burning Neste MY Renewable Diesel improves the lives of its...
Kakinada India Aemetis

Aemetis: Indian Breakthrough, California Expansion

Aemetis, Inc. (AMTX:  NasdaqCM) just announced sales of biodiesel to gas stations in India.  The sales follow on the heels of a significant ruling in November 2018, by the Bombay High Court to remove restrictions on biodiesel that had barred direct to consumer sales by biofuel manufacturers.  The breakthrough into the India market is significant for the company, which has been operating a 50-million gallon integrated chemicals and fuels facility in Kakinada, India for several years.  Demand for renewable fuels has been strongest among fast growing economies like India, where decision makers fear dependence upon imported fossil fuels.  India produces only about 1% of global...

Aviation Biofuels: The Year of the Tree

by Jim Lane When the world’s leaders for sustainable aviation fuels have a general meeting the week before the COP24 global climate sessions (this year in Poland), you can bet that the focus will be breaking the “You Can Have Two out of Three Conundrum” of aviation fuels. Which is to say: affordable, available at scale, and sustainable, pick any two of the three. Fossil fuels are (usually) affordable and always available at scale. Sustainable jet fuels that are available at scale have generally not been affordable to date, and affordable sustainable fuels have been mostly explored at bench scale, so...
biodiesel operating margins

Renewable Energy Group’s New CEO: C.J. Warner

by Jim Lane In Iowa, white smoke has emerged from the Renewable Energy Group (REGI) conclave: Tesoro EVP and former Sapphire Energy CEO C.J. Warner has been named chief exec of Renewable Energy Group, at a pivotal moment for biodiesel in Washington and around the world and amidst a boom for renewable diesel like the world has never seen. REG has been making good progress with Wall Street under interim CEO Randy Howard and its share price has been on the rise, and the plants have been humming along nicely churning out hundreds of millions of gallons of biodiesel and the liquid gold...

Biofuels Industry Reacts To The New RVO Requirements

by Jim Lane What a whirlwind weekend after the U.S. Environmental Protection Agency announced their final renewable volume obligations (RVO) under the Renewable Fuel Standard program for 2019. “It’s just numbers,” some say, but oh no, not in the biofuels world. It’s never just numbers. This time it’s about waivers, fixing the damage done, and ensuring a bright future for biofuels. It’s about hollow chocolate bunnies and two steps back for some. French mathematician Rene Descartes is best known for “I think, therefore I am,” but he also said “Perfect numbers, like perfect men, are rare.” So true in this case as not...
GasolineGate

Report Alleges EPA Tests Skewed Against Ethanol By Oil Industry Influence

by Jim Lane In Washington, researchers for a report published by the Urban Air Initiative contend that “technical data that shows the nation has been exposed to decades of flawed test fuels and flawed driving tests, which in turn means flawed emissions results and mileage claims”.  The complete Beyond a Reasonable Doubt series from UAI is available here. Further, EPA emails obtained under the Freedom of Information Act reveal that, according to a report from Boyden Grey & Associates, the Agency appears to have directly solicited financial contributions and technical input, “especially on the fuel matrix,” from an oil industry controlled research organization. Of the...